Editor Reviews:

Product Description:

Amazon.com:
Amazon Best of the Month, April 2008: Debit or credit? Paper or plastic? Lease or buy? Public or private school? Have you made the right choices? Probably not, according to the important new research on the science of choice. In clear and entertaining style, Nudge: Improving Decisions About Health, Wealth, and Happiness provides a crash course on how and why humans are prone to make bad choices, and what we can do about it. Through dozens of eye-opening examples, authors Richard Thaler and Cass Sunstein demonstrate how "choice architecture"--a fancy term for the particular scenario or context in which we are asked to make a decision--can actually nudge us toward making better decisions. More importantly, the authors show that by putting the right "nudges" in place, choice architects (who range from cafeteria managers to divorce lawyers) can substantially improve just about everything important to us, from our retirement savings to the health of our planet, without removing our range of options. Recommended for fans and foes of Freakonomics and Predictably Irrational. --Lauren Nemroff

Thaler and Sunstein: By a nudge we mean anything that influences our choices. A school cafeteria might try to nudge kids toward good diets by putting the healthiest foods at front. We think that it's time for institutions, including government, to become much more user-friendly by enlisting the science of choice to make life easier for people and by gentling nudging them in directions that will make their lives better.

Amazon.com: What are some of the situations where nudges can make a difference?

Thaler and Sunstein: Well, to name just a few: better investments for everyone, more savings for retirement, less obesity, more charitable giving, a cleaner planet, and an improved educational system. We could easily make people both wealthier and healthier by devising friendlier choice environments, or architectures.

Amazon.com: Can you describe a nudge that is now being used successfully?

Thaler and Sunstein: One example is the Save More Tomorrow program. Firms offer employees who are not saving very much the option of joining a program in which their saving rates are automatically increased whenever the employee gets a raise. This plan has more than tripled saving rates in some firms, and is now offered by thousands of employers.

Amazon.com: What is "choice architecture" and how does it affect the average person's daily life?

Thaler and Sunstein: Choice architecture is the context in which you make your choice. Suppose you go into a cafeteria. What do you see first, the salad bar or the burger and fries stand? Where's the chocolate cake? Where's the fruit? These features influence what you will choose to eat, so the person who decides how to display the food is the choice architect of the cafeteria. All of our choices are similarly influenced by choice architects. The architecture includes rules deciding what happens if you do nothing; what's said and what isn't said; what you see and what you don't. Doctors, employers, credit card companies, banks, and even parents are choice architects.

We show that by carefully designing the choice architecture, we can make dramatic improvements in the decisions people make, without forcing anyone to do anything. For example, we can help people save more and invest better in their retirement plans, make better choices when picking a mortgage, save on their utility bills, and improve the environment simultaneously. Good choice architecture can even improve the process of getting a divorce--or (a happier thought) getting married in the first place!

Amazon.com: You are very adamant about allowing people to have choice, even though they may make bad ones. But if we know what's best for people, why just nudge? Why not push and shove?

Thaler and Sunstein: Those who are in position to shape our decisions can overreach or make mistakes, and freedom of choice is a safeguard to that. One of our goals in writing this book is to show that it is possible to help people make better choices and retain or even expand freedom. If people have their own ideas about what to eat and drink, and how to invest their money, they should be allowed to do so.

Amazon.com: You point out that most people spend more time picking out a new TV or audio device than they do choosing their health plan or retirement investment strategy? Why do most people go into what you describe as "auto-pilot mode" even when it comes to making important long-term decisions?

Thaler and Sunstein: There are three factors at work. First, people procrastinate, especially when a decision is hard. And having too many choices can create an information overload. Research shows that in many situations people will just delay making a choice altogether if they can (say by not joining their 401(k) plan), or will just take the easy way out by selecting the default option, or the one that is being suggested by a pushy salesman.

Second, our world has gotten a lot more complicated. Thirty years ago most mortgages were of the 30-year fixed-rate variety making them easy to compare. Now mortgages come in dozens of varieties, and even finance professors can have trouble figuring out which one is best. Since the cost of figuring out which one is best is so hard, an unscrupulous mortgage broker can easily push unsophisticated borrowers into taking a bad deal.

Third, although one might think that high stakes would make people pay more attention, instead it can just make people tense. In such situations some people react by curling into a ball and thinking, well, err, I'll do something else instead, like stare at the television or think about baseball. So, much of our lives is lived on auto-pilot, just because weighing complicated decisions is not so easy, and sometimes not so fun. Nudges can help ensure that even when we're on auto-pilot, or unwilling to make a hard choice, the deck is stacked in our favor.

Amazon.com: Are we humans just poorly adapted for making sound judgments in an increasingly fast-paced and complex world? What can we do to position ourselves better?

Thaler and Sunstein: The human brain is amazing, but it evolved for specific purposes, such as avoiding predators and finding food. Those purposes do not include choosing good credit card plans, reducing harmful pollution, avoiding fatty foods, and planning for a decade or so from now. Fortunately, a few nudges can help a lot. A few small hints: Sign up for automatic payment plans so you don’t pay late fees. Stop using your credit cards until you can pay them off on time every month. Make sure you're enrolled in a 401(k) plan. A final hint: Read Nudge.

Rating : - Nudge for goodness sake
Nobody forced my neighbor to buy that expensive plasma TV. After reading Nudge now he knows why he spent so much more money than he intended. It seemed like such a bargain, standing right next to a much more expensive set in the store display. In Thaler and Sunstein's terms, the store nudged him to buy that TV. They organized the choice set in a way that gently moved him towards what they want him to do. They got him to buy a pricey TV by taking advantage of the principle of contrast. Such psychological biases have been exploited since the beginning of human commerce to sell us things we don't need. This book makes a compelling argument that the same psychological biases can be used to get us what we really want.

After reading Nudge it is easy to understand how small things can make a big difference. For instance, most people I know would like to save more money; most of them don't. Nudge convincingly argues that people can, and should be helped to do that. Very few of us can commit to saving more money today, but most of us can commit today to save more money tomorrow. This human tendency can be used to help people save, and Nudge describes how several companies have already implemented such programs successfully by nudging employees to committing in advance to save part of a future salary increase.

By relying on a large body of work in Psychology and Behavioral Economics, Thaler and Sunstein elegantly argue that people have predictable, systematic biases and that this knowledge can be put to work to help all of us.

Their basic thesis is simple and brilliant: First, how options are presented matters. There is no neutral way to present options. If you present the salads first in a buffet, people will eat more healthy food than if you put salads at the end. Second, don't reduce choice, but organize the options so that people will be more likely to end up with what they themselves would prefer. This is as true for the salad bar as it is for health care.

This amazing book is useful for individuals and policy makers. Policy makers should be interested because such "choice architecture" is strictly non-partisan. Individuals should be interested because this book will nudge them to improve their life their way.